Alabama’s insurance commissioner this week urged property insurers to be judicious in the use of drones and aerial imagery in making nonrenewal decisions, but stopped short of issuing new regulations.
“If an insurer uses aerial imagery as a basis for non-renewal, it is best practice to notify the affected property owner before initiating the non-renewal action,” reads the June 17 bulletin posted by Alabama Insurance Commissioner Mark Fowler. “When initiating a non-renewal action based upon aerial imagery, insurers should be utilizing recent, accurate imagery.”
The nudge comes after months of news reports around the country about homeowners contending that their insurance carriers have dropped coverage based on inaccurate or grainy aerial images of their roofs. Regulators and lawmakers in several states have responded with stricter rules on drones.
In New Hampshire, the Insurance Department in February warned insurers that non-renewals cannot be based solely on cosmetic appearances and images. Delaware’s Department of Insurance in March issued guidelines that stressed that discoloration and streaking on roofs do not constitute valid grounds for cancellations, according to news reports. In California, a bill that would require insurers to notify property owners of aerial inspections passed the state House this month and is awaiting action in the state Senate.
Other states, like Alabama, have been less forceful in their reminders. The Alabama DOI bulletin noted that, “if possible, aerial imagery should not be the only information utilized in decision-making.” Blurry or older images that appear to show staining or discoloration “will usually not be sufficient, standing alone, to prove that a roof must be replaced.”
Insurers should work to obtain better information through a physical inspection or otherwise, the bulletin said. The burden is on the insurer to prove the reason for the non-renewal.
The department noted that it is best practice to notify policyholders ahead of time and provide them with copies of images used in the non-renewal decision. If property owners file complaints with DOI, they will be entitled to see the evidence. The memo did not say the number of complaints the department has seen this year.
“Many complaints … stem from a lack of communication,” Fowler noted. “The Department believes that some of these complaints can be resolved or avoided when insurers communicate clearly with affected property owners…”
Photo: (AP Photo/Gerry Broome, File)
Topics
Carriers
Alabama
Interested in Carriers?
Get automatic alerts for this topic.
Source link